Modell’s Sporting Goods, a Manhattan-based, family-owned chain that has been peddling bats, balls and the likes of PF Flyers in the Northeast for 131 years, is shutting down its remaining 141 stores and going out of business. It has already liquidated more than a dozen locations but, citing the retail environment, filed for Chapter 11 in U.S. bankruptcy court in Newark, New Jersey yesterday.
“Fourth-generation owner Mitchell Modell had tried to line up support with its stakeholders to keep the chain out of court, including vendors and lenders, but ultimately fell short. The company decided that if it was unable to find a buyer by 12:30 p.m. Tuesday, it would file bankruptcy and begin liquidating, Modell’s said in court papers,” according to a SGB Media blog post.
“Modell, 65, the company’s president and CEO, said in an interview on Wednesday night that it was a gut-wrenching decision,” Neil Vigdor reports for The New York Times.
“‘Today, I had the worst day of my life,’ Mr. Modell said.”
“He added that the combination of an unseasonably warm winter, six fewer days in the shopping season this year between Thanksgiving and Christmas, competition from Amazon and the coronavirus pandemic have hurt the company’s bottom line,” Vigdor writes.
“Modell has in recent interviews said a warmer-than-normal winter hurt sales of cold-weather merchandise, while the New York Yankees’ failure to make the baseball World Series and the New York Jets and Giants football teams’ losing records hurt jersey sales,” Reuters’ Jonathan Stempel and Praveen Paramasivam write.
“The company has been fighting for its life since 2019, when The Wall Street Journalreported the company had hired restructuring advisers to help it cope with competition from retail behemoths such as Amazon.com Inc. and Walmart Inc.,” Soma Biswas writes for The Wall Street Journal.
“The revelation spooked suppliers, which cut daily shipments to the company’s distribution center by more than half. Modell’s spent the ensuing weeks stabilizing the business and convincing vendors it wasn’t about to disappear,” Biswas adds.
Modell's, “which sold mid-priced active wear brands, faced increasing competition from Dick's Sporting Goods, the only national sporting goods chain left. Dick’s recently pulled out of a sales slump by focusing on service at the stores and catering more to women, the AP’s Anne D’Innocenio writes for USA Today.
“Meanwhile, Modell's wrestled with more competition from Target, Walmart and Kohl's, all of which are sprucing up their activewear lines. Amazon has been stepping up its assortments too. And at the high end, shoppers have options like Lululemon and Gap's Athleta,” D’Innocenio adds.
“Modell's didn't stand out,” Neil Saunders, managing director at GlobalData Retail tells D’Innocenio. “There's a lot more competition.”
“Sporting goods’ retailers have been hit hard by the shift to online shopping. Sports Authority, Eastern Mountain Sports, and City Sports have also filed for bankruptcy in recent years. Most customers do not buy new baseball gloves or hockey sticks frequently, and there are more options to buy running sneakers and workout gear than ever before online. Modell's, with a large presence in New York City, faced the added hurdle of meeting city landlords' high rent costs,” Nathaniel Meyersohn points out for CNN Business.
“Dick’s Sporting Goods, one of the last national sporting goods chains standing, has benefited from rivals’ closures. The company has more than 700 stores and has posted strong sales growth in recent year,” Meyersohn adds.
Modell’s was founded in 1889 by Morris A. Modell on Cortlandt Street in lower Manhattan, according to the company website. It has about 4,000 employees. Its stores are located in New York, New Jersey, Pennsylvania, Connecticut, Rhode Island, Massachusetts, New Hampshire, Delaware, Maryland, Virginia and Washington, DC. In partnership with Tiger Capital Group, it will start liquidation sales on March 13.
“The [bankruptcy] news comes just weeks after the mall location was granted extra innings to stay in operation” at the Lehigh Valley Mall, Stephanie Sigafoos reports for The Morning Call of Allentown, Pennsylvania.
“We worked with the landlord to avoid closing,” CEO Mitchell Modell told Sigafoos in an email at the time.
Now the game has been called due to poor playing conditions.